All-wheel drive (AWD) capable vehicles are capable of operating in four wheel (4W) drive and two wheel (2W) drive. Typically, AWD-capable vehicles include a transfer case, a rear drive shaft, and a front drive shaft. The transfer case is configured to divide power between the rear and front drive shafts when the vehicle is operating in 4W drive. Additionally, AWD-capable vehicles also can include a locking device, such as a locking hub or the like, to engage and disengage front wheels and a front drive axle. Conventionally, AWD-capable vehicles include a switch through which a driver can manually select 4W or 2W based on the driving conditions. Additionally, most AWD-capable vehicles typically engage 2W drive through the transfer case only, i.e. by sending power only to the rear drive shaft. These vehicles leave the front axle locked when entering into 2W drive leading to parasitic losses and decreased fuel efficiency.